Los Angeles daily herald., 1887-09-20
SEPTEMBER go, 1857
How the wheat Deal was Manip-
ulated.

=
IHew the wheat Deal was Manip-
ulated.
The gigantic proportions of the San
Francisco wheat deal, the boldness OF
the enterprise and the large number
of people involved one way or another,
all lend to the affair more than pass
ing interest. The press OF the city
which was the scene of this exploit
naturally tries to give its readers as
far as possible the inside history OF the
deal. But there are the best of rea-
sons why the public should not get at
this inside truth. Hence those who
were concerned in the manipulation Of
the scheme are unusually reticent as
to the bottom facts. That the metro
politan press is guessing wildly at the
truth is evidenced by some statements
put forth. Charlie Reed, the big Yolo
granger, is reported as having guaran-
teed the credit of Dresbach and Rosen-
field at the Nevada Bank to the modest
time of 100000. No one who
knows anything about the finan-
cial ability of the gentlemen in
question will believe that any institu-
tion would accept his paper for even
the tenth part of such sum. A state
ment from one of the Bank Commits
sioners which appeared in our col
umns yesterday morning proves that
Mr.. Reed hadsbacked the dealers in
the corner to the amount of only
$50, 900. The bank had loaned Dres-
bach and Rosenfeld only some two
millions of dollars, and for this it
held collaterals fully equivalent for
all excepting about one and one quar-
ter millions of dollars. That the
Bank Commissioners were conserva-
tive in their estimates seems amply
established by what they allowed upon
the wheat held by the bank as part OF
the security. The amount was $40
per ton, or 81 per Genital. Wheat is
now saleable at $1.25 ] per CEN
fal in San Francisco, and
that is as cheap as the
commodity has ever sold in that mar
ket. The real property, ships and
coal held as collateral: were probably
estimated on the same conservative
basis of values.
Now, inasmuch as the sums loaned
by the bank, and other parties as set
forth in Dresbach's statement-and
that statement is probably correct;
for Dresbach is too shrewd to attempt
to juggle in this wise-is far too mea-
gre to cover the requirements of the
great deal, the question arises how
was the scheme carried out with so
small means? 1t was in this wise.
The leaders in the scheme sent their
agents into all parts of the State to
buy wheat from, the farmers direct.
For this wheat prices ranging all
the way from $3.50 to $2.12ha per CEN
tai we're agreed to be paid. Those
best qualified to judge estimate
that the average cost of the grain was
perhaps $2.O5 per Genital. Take 50 as
= car eful estimate of such average,
and to serve for the purposes of our il
lustration. The agent of the bull
clique finds farmer with one thou
sand tons of wheat or more. He
agrees to buy this at the rate of $40
per ton, and pays the granger So per
ton cash, and gives him notes made by
his principals for the other $32 per ton.
On this he gets the wheat, and it is
accordingly loaded aboard ship and
cleared for Europe. The farmer has
got forty cents per Genital for his grain.
He holds the notes of some member of
the bull clique which has all gone un-
der the financial sea never to rise again
until they have all gone through the
courts in bankruptcy, when they may
bob up sercnely from below
And manipulate a new deal. On
the basis of So per ton, a few millions
Of cash corners a good deal of wheat.
OF course the clique was selling all the
time, and at prices running up to
80 per ton, $3.50 and $4s.5O per ton.
Moreover, cargo of wheat raised and
threshed in Colusa, Yolo or San
Joaquin counties, and sent to San
francisco to be put aboard ship, by
the time the vessel clears, will absorb
enough water to increase the weight
70 the equivalent of $1,000, rated at the
buying price in the interior.
Now, to whom are the farmers to
look for the payment OF these notes.
Dsesbech has nothing in sight. What
uar ~ lso ~ q these cargoes, and
r1ever mon Re has received, the